The Telegraph | October 11, 2009
By Alastair Jamieson

The devices, which the government plans to install in every home by 2020, will also tell energy firms what sort of appliances are being used, allowing companies to target customers who do not reduce their energy consumption.

Privacy campaigners have expressed horror at the proposals, which come as two million homes have 'spy' devices fitted to their rubbish bins by councils who record how much residents are recycling.

The government wants every home in Britain to have smart meters, which give users information on how to save energy and send real-time data direct to utility companies, eliminating the need for customers to stay at home for meter readings or to receive estimated bills.

The devices also pave the way for a national 'smart grid', backed by David Cameron's Conservatives, which would use the data to manage national demand more efficiently and advise households when it is cheapest to switch on appliances.

In its impact assessment, however, the Department for Energy and Climate Change (DECC) says there "is theoretically scope... for using the smart metering communications infrastructure to enable a variety of other services, such as monitoring of vulnerable householders by health authorities or social services departments."

It adds: "Information from smart meters could also make it possible for a supplier to determine when electricity or gas was being used in a property and, to a degree, the types of technology that were being used within the property. This could be used to target energy efficiency advice and offers of measures, social programmes etc to householders."

Doretta Cocks, founder of the Campaign for Weekly Waste Collection, said: "This is Orwellian. We're already under surveillance for what we put outside the home in bins and now we could be watched for what we're doing inside as well.

"Most of us are happy to reduce our energy consumption or reduce waste but these measures always seem to come at the expense of our privacy. If I want advice on energy efficiency I will ask for it."

Guy Herbert, general secretary of NO2ID, said: "Information from smart meters might be useful to energy providers and perhaps even their customers, but there's no reason for any public authority to have access to it – unless they've a warrant to do so.

"This document is a prime example of government efforts to shoehorn data sharing and feature creep into every new policy. For example, it suggests that NHS or social services could use the system to monitor 'vulnerable householders', or that companies could use the system to spam customers with adverts for their services – having paid the government for the privilege, no doubt."

The DECC document adds households could even have their power to some appliances turned off remotely to help the national grid if there is too much demand. It says: "In terms of potentially intrusive non-physical behaviour unrelated to data, smart metering potentially offers scope for remote intervention such as dynamic demand management, which is designed to assist management of the network and thus security of supply. This could involve direct supplier or distribution company interface with equipment, such as refrigerators, within a property, overriding the control of the householder."

It also says potential extra uses for smart meters would need to be checked to ensure compliance with the Data Protection Act.

The Information Commissioner's Office said it had already discussed the issue of smart meters with some suppliers, including Eon, Scottish Power and British Gas. A spokesman said the ICO would "continue to maintain a close dialogue to ensure that their introduction does not compromise customers' privacy".

He added: "Important issues include what information is stored on the meters themselves, in particular whether information identifying the householder will be held. In any event energy companies will clearly need to hold records linking meters with householders and all the information must be held in line with the requirements of the Data Protection Act."

A spokeswoman for the DECC said: "The accurate, informative data that smart meters provide will be of great value to consumers. Rules and safeguards governing access to, and the use of, the data from smart meters will be reviewed as part of the Government's work in preparing for the start of the mass smart meter roll-out."

Consumer Focus, the watchdog, has also expressed concern about the privacy implications of the meters, saying consumers are "at risk of unfair, excessive, inequitable and inefficient charging" because energy companies could use the new data to introduce more complex tariffs to maximise profits at peak times.

The government has yet to decide who will pay for replacing Britain's 47 million meters, which could cost up to £8bn over the next 20 years. Its preferred option is for the cost to be met by energy firms, who stand to gain the most from meters as they remove the need to employ meter readers or calculate estimated bills.

More than two million households in Britain have microchips in their council bin. Sensors and weighing equipment fitted to the back of each rubbish lorry allow the council to collect data as each bin is raised. Information collected from outside each household is downloaded to a database that allows officials to monitor how much waste each household is producing for waste and for recycling. Officials then use the data to target errant streets and households in a bid to increase recycling rates from 43 per cent to 60 per cent.